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tv   First Business  FOX  October 4, 2012 4:00am-4:30am PDT

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emerged as the winner in last night's debate. in today's cover story, screws are coming loose at american airlines. why the airline's seat situation could send the wrong message to passengers. plus, how groupon's disappointing stock performance has affected the portfolios of former employees and investors. and, did union protests over a teacher movie pay off at the box office? first business starts now. you're watching first business: financial news, analysis, and today's investment ideas.
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good morning. it's thursday, october 4th. i'm angela miles. in today's first look: applied material is cutting up to 1,300 jobs. an earnings warning from hewlett-packard could weigh on the market today. hpq lost 13% of its value yesterday, after the ceo lowered expectations of company growth. also on trader minds - the oil tank. oil prices dipped below $88 yesterday. investors have a new view on netflix. that stock shot up nearly 11% on postive anlaylst comments. and marriott stock gained some points last night. the hotel chain topped earings expectations, but offered lowered profit guidance. larry shover of sfg alternatives joins us now for a closer look at the trading day. good morning to you. will oil be the big story of the day today larry? > > it could be. keep in mind oil dropped over 3% yesterday. we found out the refinery margins are higher, inventories are at a 3-month high right
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now. i hate to break the news, but i don't think we're going to see oil going much lower from here. > > what about the stock market? it feels like stocks are at a standstill. > > right now the pain train seems to be going higher. new york stock exchange came out yesterday reporting that volumes are down 7% on a 3- month average. it's a convictionless market, but people have to put their money to work, and i think we're just ratcheting higher very slowly. > > how much will hewlett- packard's problems play into the trading today? the company's ceo meg whitman coming out and saying she sees 2013 as a fix- it kind of year. > > it's something that's contagious in earnings season, a big company like hewlett- packard saying something like that on the backs of what caterpillar said last week, i think that they're trying to set everybody up for lower expectations for the technology sector, and for the whole earnings season combined. it's just not going to be as good as people are hoping for. > > would you by hewlett- packard at these levels?
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> > i think right now technologies could be a winner, just look for value, look for a drawdown in the market. right now, people are chasing data, people are chasing technology. i would hold off and wait a little bit. > > larry shover of sfg alternatives. thank you larry. > > thank you. it was all about domestics in denver, as the country tuned in for round one of the presidential debates. the candidates focused on major issues including jobs and the u.s. economy. my plan has 5 basic parts. one get us north america energy independent, that creates about 4 million jobs. number two open up more trade particularly in latin america, crackdown on china if and when they cheat, number three make sure our people have the skills they need to succeed, and the best schools in the world (we're far away from that now), number four get us to a balanced budget, number 5 champion small business. gov romney's central economic plan calls for a 5 billion dollar tax cut, on top of the extension of the bush tax cuts--
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that's another trillion dollars and 2 trillion dollars in military spending that the military hasn;t asked for. that's 8 trillion dollars. how we pay for that, reduce the deficit, make the investments we need to make without dumping those costs on the middle class americans is one of the central questions of this campaign. president barack obama and former governor mitt romney adapted to the new format of debate, six segments of 15 minutes each. the next presidential debate is october 16th. mr. romney is expected to hit the airwaves today with a barage of tv ads. according to the new york times, the romney camp has been quietly increasing its ad spend, and could shell out up to $13 million in commericials in swing states. meanwhile, president obama is outpacing mr. romney with tv ads. the times reports it's especially noticeable in flordia, where pro-obama ads outnumber pro-romney ads by nearly 50%. the obama camp is also strategically spending large amounts of money on campaign ads runing during shows heavily watched by women
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and young people. a federal court has decided to allow american airlines passenger service agents to hold union elections. the airline had tried to block the elections among 10,000 of its employees. that's on top of going through bankruptcy proceedings and a new problem explored in our cover story, rows of seats coming loose during three flights within the past week. federal officials are looking into why rows of seats came loose during three separate american airlines flights. no one was injured, but two of the jets had to make emergency landings. some say faulty locking pins are to blame. "they know it wasn't sabotage. it's a pin that's used by american maintenance crews and outsource contractors." but others suspect more. "i think it's labor-related. i think you've got pissed-off union employees upset at increased outsourcing." american airlines said clamps designed to hold the seats were installed improperly on at least six boeing 757s, either at the airlines' maintenance facility in tulsa, oklahoma, or by outside contractor timco
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aviation services in greensboro, north carolina. "the loose seats appear simply to be a defect of outsourcing, someone not doing their job, but there's also some passive resistance going on." loose seats add to the list of headaches at american, which has accused some pilots of a work slowdown that's led to flight delays since mid- september and preparations for 4,000 layoffs as part of restructuring under bankruptcy protection. "it's symptomatic of an organization that's not on top of their maintenance situation." "i don't think it translates into a safety risk, but there's something there to be studied." the transport workers' union, which represents mechanics at the airline, denies any link between mechanical problems and
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labor disputes. as mentioned earlier, oil prices plunged below $88, mostly on concerns of slower growth in china. but at the gas pump, prices remain stubbornly high. the average cost of a gallon of unleaded is up 37 cents compared to 2011. "this year, there's pockets of the united states, particularly in the west and northeast, where there is extremely low supply, which has pushed prices even higher in those regions. that was beth mosher of aaa. refinery shutdowns on the west coast and closed plants on the east coast are reducing supply. some analysts take another view and predict gas prices could actually fall 10 to 15 cents based on histroic data. meanwhile, a poll by gallup indicates voters are barely concerned about prices at the pump. the nasdaq nixed early trades of kraft foods. yesterday, trades of kraft foods were cancelled after being deemed erroneous. this week kraft and its snack business mondelez
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international split into two separate public companies. yesterday in early trading, kraft shares jumped to $58 after opening at $45. nasdaq is looking into what happened. all trades above $47 will be cancelled. a merger between t-mobile and metro pcs creates a big player in prepaid phone cards. the struggling wireless companies are combining cell phone businesses to compete against verizon, at&t and sprint. combined, the two companies will service 42 million subscribers and could attract more customers who prefer using prepaid phone cards to avoid a contract. 3m is cleaning house. 3m will scale down the company from six divisions to five. divisions will include consumer, health care, industrial, safety and electronics. earlier in the week, 3m announced it had bought out ceramics company ceradyne. a government agency reports findin a number of false labels on supplements. according to
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investigators, 20% of 127 weightloss and immune-boosting supplements carry labels with illegal claims. there were even products claiming to cure or prevent cancer or diabetes or helping with hiv or aids. consumers buy up to $20 billion in supplements online and in stores. the robust apartment rental market is starting to crack as home buying steps up. apartment occupancies inched up in the third quarter. more americans are deciding to buy homes as mortgage rates drop to record lows. the 30-year fixed is 3.40%. last week, home buying applications rose 4%. re-fis soared 20%. mortgage rates are falling as the federal reserve continues to buy mortgage- backed securities to stimulate the economy. the apple rumor mill is buzzing with word of a mini ipad. reports say "mass production" of a smaller ipad is in full swing. the wall street journal says the mini pad will likely be released this month. meanwhile, if you are not happy with apple
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maps, starting today apple's new operating system is bringing back google maps, which users can now access and download. redbox is going beyond movies. redbox is popular for its dvd rentals. eventually you will be able to buy tickets to concerts and other events at redbox kiosks. the chicago tribune reports philadelphia is the first city to get redbox tickets. for the forth year in a row, there's no baby boom. fewer babies were born this year. it's been a trend since the recession hit. prior to 2008, birth rates had risen steadily since the early 90s. however, since the economy tanked, baby births have declined. still to come, some surprise hits are helping bring audiences back to the box office. that's later in movies and money. but first, groupon's shares have dropped dramatically in
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value. we'll hear what some former employees have to say about that. paul eggers reports, next.
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lifelock is one of eight companies launching ipos this week. the identification company had an initial price tag of $9. it closed out its first trading day at $8.36. other companies going public this week include dave and buster's and luxfer holdings, to name a couple. it's the most companies going public in one week since
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july, with the wall street journal reporting the deals are expected to raise over a billion dollars. in less than one year, online coupon company groupon moved from massively hyped to a mostly forgotten $4 stock. paul eggers takes us behind the scenes as former groupon employees vent over the rise and fall of company stock. groupon's stock chart is not a pretty picture. from its opening on the nasdaq in november of last year to today, the stock has dropped more than 80%. during that time, while traders quickly sold off their shares, former employees of groupon like jason bowman were barred from trading their options on the open market until june of this year. "at one point during the lockout, it was about $30, and people were saying, 'boy, this could be something.' and then it went down to $7 and people said, 'boy, what happened to all
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that money?'" groupon alum dan knispel also was forced to sit on the sidelines as the value of his shares plummeted "i'd say it was rough, from time to time, especially as the number got smaller and smaller." like many early groupon employees, both bowman and knispel took a little less in upfront salary to get equity options in the firm, a decision which looked good when google nearly bought groupon for a reported $6 billion figure in 2010. "i mean, you're just thinking big. you're not thinking money after taxes or anything realistic, you're just thinking, 'i'm going to get a windfall of cash and this is going to be amazing!'" "it's not a new story for tech employees to have their options underwater. it's just kinda the breaks." in his book "groupon's biggest deal ever," frank sennett details how founding partners like eric levkofsky cashed out some of their shares before groupon's ipo, pocketing hundreds of millions of dollars. "they're the early-stage founders, they're the ones driving the bus. and there are all sorts of lessons that life
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isn't fair and that's one of them." though the rank and file still holding shares do have at least some hope for some kind of bonus. 'you know, at this point, you may have lost 66%, maybe 75%. is there a chance you're going to lose that extra 25%? yes there is, but it needs to go down another 100% from here.' knispel has pretty much cashed out 'i didn't get to buy a plane or a boat or anything' and bowman has moved on as well. 'i did have the cash to rebuild the garage for my house because it was falling apart. not sexy, i know, but sexy enough for me. it is going to be a good- looking garage.' 'it's important to note that despite seeing the stock move against them, both bowman and knispel view their time here at groupon as a positive work experience. reporting outside the firm's chicago headquarters, i'm paul eggers, first business news.' brian bolan of zacks equity research is optimistic that groupon stock can work its way back to its ipo price, but warns it could take a long time. groupon reports earnings next week.
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still ahead, will audiences be "taken" with an upcoming sequel at the box office? that's next in movies and money.
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a film about time travel and another about a hotel for monsters helped sony clobber the competition at the box office over the weekend. our movie guy, erik childress, is here. dracula is more popular than ever. > > apparently. the kids showed up in droves this weekend.
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"hotel transylvania" did the highest opening weekend for september ever. it clobbered the competition. > > and "looper" was also a big success story. > > yes. sony had the one-two punch at the box office. they had their regular sony division release the "hotel" film, and "looper" was released by their tristar division. and i'm glad people went out and saw that, it really made me happy. > > let's take a look at those weekend numbers - this is incredible: "hotel transylvania" bringing in $42 million, "looper" at $20 million, and then it just drops right down to the sevens with "end of watch," "trouble with the curve," and "house at the end of the street." what's not on here? > > [together"won't back down." > > what happened there? the unions were against this film and it worked. > > apparently. "won't back down" ended up being the worst opening weekend for a film to open on over 2500 screens. it's quite an amazing feat actually. > > and that was heavily marketed. > > it was very heavily marketed. it's a fairly mediocre film, though, so that can always play into it. but there was some talk that unions were telling people not to see
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it. and the film does have kind of an anti-union stance, but also there are people in the film that are support for the union, even the good guys. so the unions just probably didn't see the movie. > > and i would give "pitch perfect" an honorary mention here. > > it absolutely should. this is a unique marketing strategy by universal. it was always supposed to open this weekend on october 5th, and because of some good word of mouth they must've had from promo screenings, they decided to sort of sneak it into theaters for the entire week starting last weekend, and it did $5.1 million. it's the third highest amount for a film that opened on less than 500 screens. it only opened on 335 screens. it did great business. opening wide this weekend, we'll see how it does. and it's a fun movie. > > do think the show "glee" helped this movie? that show is so hot right now. > > "glee," i think "glee" has gone down in the ratings a little bit. certainly in quality. "pitch perfect" is more "glee" season one, where it's still a lot of fun and funny and the characters are great. so, if you like "glee" at the beginning, you'll like "pitch perfect." coming up this weekend, a movie i want to go see: "taken 2." i liked the first one. > > you're a big fan.
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> > movie light, you know that about me, but i think liam neeson is awesome in this film. > > a huge surprise a few years ago. did $145 million here in the u.s., and this one i expect is going to open the box office at number one, probably $30, maybe even $40 million again. it's kind of awesomely ridiculous. it's not really a good movie, it's not as good as the first, but it is kind of ridiculous. if you just go with it, you'll probably have a good time. > > and "frankenweenie." can i say that on tv? > > you absolutely can say that on tv. tim burton going back, revisiting his original short film that sort of launched his career, and he's doing it in the stop-motion animation style. this is tim burton's best thing he's done since "big fish." i hope people will take their kids to see this. they had their "hotel transylvania." "paranorman" didn't do great in august, but hopefully this one will bring the audiences in, because it's a really fun movie. > > it should be a good weekend. thank you erik. > > thank you. just ahead, will investors in monsanto reap what they sow? chart talk is next.
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matt cavanaugh of cmz trading joins us now for chart talk. matt, monsanto is one of those stocks we talked about extensively during the drought. it had a good run, but sold off yesterday on earnings concerns. is this a buying point for investors? > > i think that it's a holding point for investors. this is a really big support level for monsanto. they came out, their earnings were a little bit less than what the street was expecting. it looked like their fourth quarter was weak, but it typically is weak. this is a great company, but i think it's a really big inflexion point for them, and i would say wait and see what happens. > > where would you like to purchase this stock if you could? > > below $88, $89 a share. i think the next lot of support is $82 a share. but you know, you're really not going to go wrong with this over the long- term, i believe. you're still getting a pretty decent yield of 1.7%. the fundamentals in agriculture are strong and remain strong, and monsanto is a great, great company. as we've seen, they've had a great run, but they're only a couple
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dollars off of their 52-week high, so maybe wait and see if it settles in a little bit here. > > how does it compare to another stock, say a potash, which is also in the fertilizer business? > > i think that this is more of a pure play on seeds and a pure play on acreage. monsanto is the leading company, the leading seller of genetically modified seeds, and really it's where do you want to be, where do you want to put your money? personally, i would probably go with the best, and i think monsanto is the best, right here especially. > > thanks for your time today. matt cavanaugh of cmz trading. that's the end of the line for today. coming up tomorrow, in traders unplugged, should you make investment decisions based on what you hear in the presidential debates? our pro traders let loose with their views. but for now, thanks for watching, and have a great day!
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. president barack obama, versus mitt romney, who is being declared the winner of the first presidential debate. and this morning, they are investigating the deaths of two people they say were shot by a neighbor. we will tell you what they had to say about the suspect and
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the victims. good morning, thank you for waking up with us, this thursday morning i am pam cook, it's much cooler and it sounds like that is going to be the trend for the weekend. >> that is correct, there is a big fog bank and it is already making a strong push, temperatures will collapse, started yesterday and it will continue today, 60s and 70s for most, here is sal. good morning, steve traffic is moving well around the bay area and as a matter of fact if you are driving on highway 4, you can see traffic looks good but there are no major problems continuing. >> also traffic looks good on interstate 880 in oakland. let's go back to the desk. as we mentioned one man died in san jose and another


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